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Tuesday, August 8, 2017

WTI and Brent Crude Oil charts: bears forced to yield ground

WTI Crude Oil chart


The daily bar chart pattern of WTI Crude Oil soared past its 50 day and 200 day EMAs with good volume support, and closed above 50 (on Jul 31) after 10 weeks.

Bears decided that they had yielded enough ground. On Aug 1, oil's price touched a slightly higher top, but pulled back to its 200 day EMA before bouncing up to close just above 49.

The 'reversal day' bar (higher high, lower close) with a spurt in volumes led to a sideways consolidation between the 50 level and the 200 day EMA.

Oil's price is back in bull territory above its three EMAs, but the bearish pattern of 'lower tops, lower bottoms' from the small 'double top' at 55 (formed back in Feb '17) remains intact. A convincing move above the May 25 top of 52 is required to release the strong bear grip.

Daily technical indicators are in bullish zones after correcting overbought conditions, and showing positive divergences by touching higher tops while oil's price touched a lower top (than the one in May '17).

Bulls may make an attempt to cross above 52. Strong volumes on two down days last week indicate bears will try to prevent it. A recovery in output at Libya's largest oil field may encourage bears to sell.

On longer term weekly chart (not shown), oil's price closed above its 20 week and 50 week EMAs but below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is showing upward momentum, but looking overbought.

Brent Crude Oil chart


The daily bar chart pattern of Brent Crude Oil continued to move in lock-step with WTI Crude oil's chart. After bouncing up above its 50 day and 200 day EMAs, oil's price closed just a little below 53 on Jul 31.

The next day, a large 'reversal day' bar (slightly higher high, lower close) was formed - triggering a sideways consolidation between 51 and 53.

The 20 day EMA is about to cross above the 200 day EMA. The 50 day EMA has formed a bullish 'rounding bottom' pattern. The 'golden cross' of the 50 day EMA above the 200 day EMA will technically confirm a return to a bull market.

Daily MACD and Slow stochastic are inside their overbought zones and not showing much upward momentum. RSI is moving sideways below its overbought zone.

Bulls may make an attempt to push oil's price above the May 25 top of 54.67 to breakout of the bearish pattern of 'lower tops, lower bottoms'. Strong volumes on recent down days mean bears will resist any such attempt. 

On longer term weekly chart (not shown), oil's price closed above its 20 week and 50 week EMAs but below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is about to enter its overbought zone.

1 comment:

Subhankar said...

U.S. Oil Drillers Keep Pressure on OPEC With Record Shale Output

https://finance.yahoo.com/news/u-oil-drillers-keep-pressure-210746267.html